Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Executives

Jeff Markin – President & CEO

Molly Henderson – Chief Business and Financial Officer and SVP

Analysts

John Putnam – Dawson James Securities

Art Ballanger [ph]

Keith Gil – Matrix USA

Zak Kim [ph]

VirtualScopics, Inc. (VSCP) Q2 2008 Earnings Call Transcript August 13, 2008 11:00 AM ET

Operator

Greetings and welcome to the VirtualScopics, Inc. second quarter 2008 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator instructions) As a reminder this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Jeffrey Markin, Chief Executive Officer for VirtualScopics. Thank you, Mr. Markin, you may begin.

Jeff Markin

Thank you. Good morning everyone and thanks for joining us on our second quarter and half year 2008 investor call. We are pleased that you are taking the opportunity to learn more about the company and are looking forward to updating you on our progress. I'd now like to turn the call over to Molly Henderson, our Chief Business and Financial Officer, who will read the Safe Harbor Statement.

Molly Henderson

Thanks, Jeff. This call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which can cause the actual results, performance or achievements of the company or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this presentation, statements that are not statements of current or historical fact may be deemed to be forward-looking statements without limiting the foregoing the words plan, intend, may, will, expect, believe, could, anticipate, estimate, or continue or similar expressions or other variations or comparable terminology are intended to identify such forward-looking statements. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only to the date hereof. Except as required by law, the company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. Investors are encouraged to examine these and other risks and uncertainties detailed in the VirtualScopics periodic public filings on file with the Securities and Exchange Commission.

Jeff Markin

Thanks, Molly. This call will run for approximately 30 minutes. I will make some summary statements about our progress in the first six months of 2008 followed by a detailed financial review that will be led by Molly. We will follow our prepared statements with a Q&A session.

My discussion will focus on three areas, sales momentum, operational performance and confirmation of our overall business model. First, relative to sales, we announced a few weeks ago that our backlog of awarded projects had reached $20 million, a greater than 100% increase over our backlog one year earlier. This is the first time we have made our backlog public and are doing so to provide additional transparency to our forward-looking financials.

We are obviously very encouraged by achieving this level of backlog, which now sits at approximately three times our current revenue guidance for the year. A key driver of this performance is the combination of follow on business from current clients, initiation of three new customers this year, bringing our list of current active customers to 28, as well as the maturing of our sales force which we expanded earlier in the year. We are especially encouraged by the activity we have seen with our European-based clients. We expect these trends in awards to continue through the balance of the year further enhancing our already substantial book of business.

With the significant activity we are seeing on the sales front, it is only natural that the next area of comment would be on operations and our progress towards not only meeting these increases in demand, but doing so with increased efficiency. We are very pleased to report that our gross profit margin grew to 41% in the second quarter which is essentially on target with our business plan.

The gross margins represent only part of the story. For our customers, operational performance is all about our ability to exceed their expectations for the tight timelines they have for their clinical trials. With regard to that, we are pleased that our on-time delivery performance is in excess of 90%. We also query a subset of our clients every month to assess their satisfaction with our performance and that metric currently stands at 4.8 out of a maximum of 5.

While our clients’ feedbacks to us that they believe these metrics are industry class, we are not satisfied. In operations it is not only about where we are today, but with the growth we are experiencing, it is about where we need to go in the future, and for that, continuous improvement is key. It is all about how we continually change how we process our work in a way that is scaleable and increasingly more efficient. I will not go into details of this on this call, but what I will say is that we are increasingly more confident that we understand this and are continually making the plans and changes to enable this.

This confidence led us to launch in May the VirtualScopics performance promise which guarantees our oncology clients that we will deliver their analysis to them on time to specification or it’s free. This program is very tangible evidence to our clients that operational predictability by their suppliers should be an expectation that they can rely upon as they plan their projects, enabling them to move forward faster. While this program has only been in place in a few months, we are seeing a lot of customer interest especially within organizations that are new to us.

The last area I want to touch on before I turn the discussion over to Molly is around confirmation of our overall business model. We have stated on previous calls that we felt the business was crying [ph] for sales growth and the resulting profitability that scale would bring to the business.

Through the second quarter, we have hit our opening plan for revenue and announced a greater than 100% increase on our backlog of awarded projects. With that, our gross margins in the second quarter increased to 41% essentially as we had forecasted. We continue to be confident in the inherent strength of our business model and as the record backlog gets converted to revenue, we expect to achieve operating cash flow neutrality and begin to generate cash going forward.

Now, let me turn it over to Molly.

Molly Henderson

Thanks, Jeff. I will start by providing a summary of our June 30, 2008 second quarter results followed by the outlook for the remainder of 2008 and conclude with a summary of our position with respect to the financial market. Starting with our second quarter 2008 statement of operations, revenues for the second quarter ended June 30, 2008 were over $1.7 million compared to $1.5 million for the same period in 2007, representing a 13% increase. The increase is largely attributable to the greater demand for and the expansion of our services within the industry.

As of the end of June 2008, we had 70 active projects as compared to 63 for the same period in 2007. Our sales pipeline continues to strengthen as does our project backlog. As we previously announced and as Jeff mentioned in his comments, as of the end of June of this year, our backlog for signed and awarded projects was over $20 million compared to $9.3 million at the same period a year ago, representing a 115% increase. The length of the studies included in this backlog ranges from three months to five years.

Our gross margin improved 4 percentage points to 41% for the quarter ended June 30, 2008 over the comparable quarter of 2007, leading to a 25% increase in our gross profit. The improvement is directly related to the realignment of our resources at the end of 2007 which reduced our overall headcount and also better aligned ourselves with the areas of the market that were showing the greatest demand.

Throughout 2008, we have continued to focus on continuous improvement within our operations and further investment in the enhancement of our production platforms to gain efficiencies and better meet the needs of our customers. I have stated in the past and I still believe that the current cost structure will support at least $2 million in quarterly revenues, thereby indicating that significant additional operational costs will not be necessary as we deliver on our plans for the rest of this year.

Research and development costs decreased 44% to $213,000 for the quarter ended June 30, 2008 compared to 2007. This decrease is a result of the realignment of our resources at the end of 2007 as previously mentioned, and our research and development efforts (inaudible) around product enhancements and disease areas such as oncology, cardiovascular, musculoskeletal diseases as the market dictates, as well as the creation of operational efficiencies within our current software platform.

Sales and marketing costs increased $191,000 to $384,000 for the period ended June 30, 2008. This increase is directly related to the hiring of two sales people over the past year as well as a new marketing initiative. As I mentioned on previous calls, during the first half of 2008, we increased our investment in marketing using a portion of the proceeds raised in our Series B financing in September of last year.

Our previous marketing materials were centered on around where we were as a company in 2004 and we have made significant improvements since that time in our technology, operations and the services we offer. As a result, in the first half of this year, we updated and rebranded our sales collateral, change our booth and website to make them more reflective of who we are and the nature of the services we offer. The new material highlights this vital benefit of our services centering around our mission to advance and improve drug development.

We launched the new materials along with what we believe to be the first of its kind service guarantee in the industry as Jeff mentioned in his comments during the second quarter. The majority of expenses related to the new marketing initiative were incurred in the first half of this year and therefore we anticipate that our expenditures within sales and marketing will decline for the reminder of this year.

General and administrative costs decreased 4% or approximately 22% in the second quarter of 2008 when compared to 2007. Currently, we do not anticipate significant increases in our general and administrative costs for the remainder of 2008.

At the beginning of this year, we stated a goal of being operating cash flow breakeven by the end of this fiscal year. Operating cash flow breakeven is defined as operating loss less non-cash items, which includes depreciation, amortization and stock compensation expense.

For the period ended June 30, 2008, our operating cash outflow was approximately $466,000. This compares to over $607,000 for the same period a year ago. This 23% reduction in our cash outflow is directly a result of the higher revenues and overall cost control measures that were made at the end of last year to rely on certain areas of business that were proving to be uneconomical.

As we move into the second half of this year, our focus continues to be on operating cash flow. Over the past few months, we have experienced some delays in awarded projects. However, we have been actively trying to bridge the gap and at this point still believe that we can achieve or come close to achieving our stated financial goals that we've made earlier this year.

Turning to the balance sheet, as of June 30, 2008, we had approximately $3.2 million in unrestricted cash on hand. The change in our unrestricted cash balance for the first six months of this year was approximately $700,000. As we stated on previous calls, we believe that we have sufficient cash on hand to fund our existing operations and development and enable us to achieve operating cash flow breakeven. As a result, we still believe that further equity raises are not necessary this quarter's existing operations.

I will now turn my discussion to our situation with NASDAQ. In February of this year, we announced that we have received notice from NASDAQ that we were out of compliance with the listing requirements and that our closing bid price had not exceeded $1 over the previous consecutive trading day. At that time, we were granted 180-day cure period by NASDAQ and were informed that at the end of that period, if we did not regain compliance, we would receive notice from NASDAQ that we remained out of compliance and could then request a hearing with the Listing Qualifications Panel.

Last week, our 180-day period expired and we received word that in order to stay a delisting, a hearing with the panel is necessary. I have requested a hearing and at that hearing, I plan to request further extension of the cure period and will also discuss our plans to regain compliance which may include effectuating a reverse stock split in the event that additional grace period is not extended and we still have not regained compliance.

In the communications I've had with NASDAQ, a reverse split is seen as an acceptable means to regain compliance. Under Delaware law, we must receive stockholder approval prior to effecting a reverse split. We received this approval at the Annual Stockholders Meeting in May to allow our Board of Directors to effect the split. We believe maintaining our NASDAQ listing is important for our visibility in the financial market and developing a long-term value for our stockholders. Therefore, we will take steps necessary to ensure that we do what we believe is best for the company and our stockholders.

I will now turn it back to Jeff for final comments.

Jeff Markin

Thank you, Molly. As I hope you can tell from Molly and my comments that through the second quarter of this year, we've made significant progress with respect to the growth of the company across many fronts. Our clients have recognized this and are rewarding us with incremental business.

We would now like to open up the question-and-answer session.

Question-and-Answer Session

Operator

Thank you. (Operator instructions) Our first question is coming from John Putnam with Dawson James. Please state your question.

John Putnam – Dawson James Securities

Yes, thanks very much and good morning. Nice progress on the quarter. I was just wondering if you could maybe give us a little bit of a flavor for the backlog in terms of how long it would take you out into the future. And I guess the other question I have is, you said that you think you have enough capacity to do about $2 million a quarter. You're not far from that, and I guess my other question is what do you need to do to increase the capacity?

Molly Henderson

Hi John, thanks. As it relates to the backlog, the average life of a contract representing that backlog is about three months to five years, and so again on average it is probably about three years. A lot of that depends on the initiation timing of the projects. Typically, we see between actual signing to initiation, it could be within three months, so we expect that again those $20 million in backlog projects to really be recognized within our revenue within the next three years, 36 months on average.

Jeff Markin

The second part of your question, John, which was the $2 million, the capacity to do $2 million within our current cost structure and quarterly revenue, what that means is that as our revenue gets over $2 million, we'll probably have to add very small numbers of people in different areas just to gain some additional capacity. That being said though, we're continuing to work through our lean initiative to create capacity within our current cost structure and we'll continue to do that. But, what we were trying to put forth with that message was the fact that our current cost structure enables us the capacity to do $2 million a quarter, which is consistent with what we've said about getting to cash flow breakeven and close to 50% gross profit margin.

John Putnam – Dawson James Securities

Okay, so it's really an expansion of people and not facilities or anything of that nature?

Jeff Markin

No, I mean we've got more than enough, I mean significant IT capacity and infrastructure capacity, it's just as the business continues to grow past $2 million, we may have to add some incremental people.

John Putnam – Dawson James Securities

Great. Thanks a lot.

Jeff Markin

Thanks, John.

Operator

(Operator instructions) Our next question is coming from Art Ballanger [ph], a private investor. Please state your question.

Art Ballanger

Good morning and great work on some progress there, Molly and Jeff. My question relates to – haven't heard anything about the military contract. Can you talk further on that or is that still in the background?

Molly Henderson

Hi Art. Good question. Yes, we still continue to execute on that contract. The current contract takes us through – I believe it's November of next year. We have requested additional appropriations in the '09 Defense Bill, but because of some of the activities within the political arena, we will not probably see definitively until the Defense Bill is passed, which is obviously post election time. So, my best estimate is probably around February or March, we'll get word whether that appropriation will continue and we've asked for an additional two-year extension on the current project.

Art Ballanger

Great, thank you.

Molly Henderson

Thank you.

Jeff Markin

Thanks, Art.

Operator

(Operator instructions) Our next question is coming from Keith Gil with Matrix USA. Please state your question.

Keith Gil – Matrix USA

Good morning. Just quickly based on that follow on the military contract, the two-year extension, what does that mean in terms of revenues if any?

Molly Henderson

It would be consistent with what we've already got. It was a $2.3 million initial contract, actually it was two contracts totaling to $2.3 million, and the additional appropriation we've requested in comparable amounts for two-year follow-on. So, it would be consistent with the $700,000 to $900,000 annual run rate we've been receiving with the DOD contracts.

Jeff Markin

And the Naval Research Labs which is the part of the Department of Defense that we're working with has been very supportive of us getting that add-on or plus-up because of the work we've been doing for them, they've greatly appreciated and are getting good value off of it, so we're optimistic.

Keith Gil – Matrix USA

And then what if any future business or contracts can you render from this research project with the military?

Jeff Markin

Well, we continue to – as we see the military putting out proposals for different projects that our technology would lend itself to, we continue to apply for those. We have applied for a few, some we're waiting to hear on, others we have heard on, but we'll continue to look for other areas within the government that we can apply similar technology.

Keith Gil – Matrix USA

Can that be applied to the commercial market?

Jeff Markin

Well, some of the projects actually that come through the military, they initially post up a military application but they want some of this technology to find its way into the commercial sector. So, those and a few other projects, that was a requirement and they’re looking for the company that secures a contract like that to have infrastructure to actually implement it in the commercial space. So, again, we’re just going to have to keep looking through those. Obviously, we would look to leverage that technology from the military and the commercial space as well. So, we’ll just continue looking for the right one.

Keith Gill – Matrix USA

Fair enough. Two further questions if I may. I think you alluded to some new sales material, the guarantee program, can you speak a little bit further on that and when those new sales materials were actually sent out, and the guarantee program, what kind of feedback you’re getting, please?

Jeff Markin

Yes. Molly said during the discussion, our sales materials have been put together back in 2004. This was at a time where most of the projects we were working on were research focused or early phase clinical trial focus, message [ph] trials which is really where we had come from as a company. Today, we’re competing for very large late stage trials where the science is important but also there are many other aspects of the services that we provide that are important like operational effectiveness, operational capability, timeline flexibility, those sorts of things which are some of the key criteria for awarding these large later phase contracts to organizations like ours.

So, we did a complete upgrade of our materials so that it resonated with those communities that are evaluating those RFPs or request for proposals and so we did that in the first part of this year. Concurrent with that, we updated our Web site and our trade show booth materials to be consistent with that. We believe that the materials we have now really resonate not only with customers but reflect where we’re going as a company and we’ve gotten very good feedback from people on that.

Keith Gill – Matrix USA

The guarantee program?

Jeff Markin

Yes. The performance promise we launched concurrent with the new materials and the new branding coming out and essentially, what it says is that, for a project as we commit to our clients' time frames and we commit to the biomarkers and the type of analysis that they want, that we’ll not only commit to the date, but we’ll stand behind them. And what we’ve heard from many of our customers is that people in the industry like us are very quick to commit to days to provide things to secure a contract, but then when it comes to time to actually deliver on them, they are less than able to do that. So, what we put forth which will we believe is really the first of its kind in our industry is not only when we commit to a date and be confident that we can do it, but we’ll stand behind it in terms of if this is late, the client will not pay for that work.

Keith Gill – Matrix USA

Have you actually started this program yet?

Jeff Markin

Yes. We’ve got a couple of projects that we brought on since that guarantee was issued and those are under the guarantee. If you remember in my prepared statements, I talked about our on-time delivery performance are greater than 90%. That on-time delivery performance gives us the confidence that we’ll be able to meet the time frames that we commit to. And again, our clients tell us that this kind of delivery performance is performance based on a custom to receiving on a consistent basis. So, we’re excited about it. We believe that enables us to leverage the operational capabilities that we’ve developed into more agreements and especially new customers that haven’t become accustomed to working for us. It’s been a door opener for us. So, we’ve got projects in our sales pipelines now that are directly as a result of having this in place.

Keith Gill – Matrix USA

I hate to dominate the call, two more though if I may, regarding the $20 million backlog, is that safe to say roughly about $6.5 million of that would be recognized next year based on 36 months?

Molly Henderson

I think that’s a reasonable estimate. Again, I am little bit cautious because certainly delays and patient requirement are things that are outside of our control and (inaudible) attributed to that number but I think where you are in that estimate is where I was come close to seeing.

Keith Gill – Matrix USA

Hope you are also positive that you’ll be able to answer that between now and the end of the year, correct?

Molly Henderson

Absolutely.

Keith Gill – Matrix USA

And one last one if I may, and again I apologize, any chance of you not doing a reverse split, this is again regarding you’re NASDAQ delisting?

Molly Henderson

Right. And again we believe it's in our best interest to maintain our NASDAQ just from the visibility to the company and the ease of transaction for our stockholders. We’re certainly doing what it takes to make sure we maintain that. We continue to try and do that outside of a reverse split by putting out positive news on being involved in the financial market from a presentation standpoint. But in the event that, again, we don’t – if we don't stay in compliance with the dollar, we’ll look at the reverse split as something that we would effectuate.

Keith Gill – Matrix USA

And what’s the max?

Molly Henderson

I was just getting there.

Keith Gill – Matrix USA

Sorry.

Molly Henderson

The max that we’ve got approval for from our stockholder is 1 to 4. So, obviously, the component is where our stock price is at the time we look to effectuate that. So, those will be considered at the time, but again, we believe that maintaining our listing on NASDAQ is important to our stockholders.

Keith Gill – Matrix USA

Okay. Sorry about that. Thank you.

Jeff Markin

Thanks, Keith.

Operator

(Operator instructions) Our next question is coming from Zak Kim [ph], a private investor. Please state your question.

Zak Kim

Yes. Hello Jeff. Hello Molly. I appreciate the reports. Unlike that apologetic guy in the past, I just have two questions. I will throw them out and then you guys can answer. I like to look at companies from a couple of different perspectives and one of them often a measure for me is employee retention. I’m curious. How many employees do you have at this time that you would consider your full time staff and also how was employee turnover measured and how are you doing on that front? The follow-up is, for long term investors, people that where you’re early financing type of persons, this has been a long stretch and we’re in a completely different position than overlooking projections would have been on the initial type of perspective. Given that, I mean, you may not be able to comment too far on this, but those early investors may have been brothers and cousins or friends of brothers and cousins, what would you say, Jeff, and what you say, Molly, to friends of friends and friends and give them a reason to buy stocks today? Thank you.

Molly Henderson

Sure. Thanks for the question, Zak. Let me address the first one as it relates to retention and HR policies. We actually have very specific metrics as it relates to employee retention and turnover. We have an HR Director that is very keen on making sure that the morale is good. We do certain things and we have programs in place to really reward employees and recognize people for their work and their hard efforts and I believe that we’ve gotten very good feedback on that. And on the flipside too, we also do employee surveys to give the employees a chance to communicate any issues they have or offer any suggestions, and we take those very seriously. We actually have formed a group of employees that lead up that committee and help come up with suggestion. Nobody on management is on that staff and we value their contribution.

So, I think those are the things we put in place to make sure we retain our people. And I think what you’re hitting on is absolutely appropriate. As a service-based company, our employees are our key assets. So, we do recognize that and make sure that we reward and retain our people. In saying that, it is a competitive industry, so we will lose people from time to time, but I think so far, we’ve done a good job of making sure that we recognize those key individuals.

And to your second question, I will start and then Jeff can answer. But as far as people buying into the stock today, it is in great value and I certainly recognize people that may have paid a higher price in the past and the impact that has on them financially. But, as far as encouraging people to buy the stock today, (inaudible) I want to tell you. If you look at our backlog, you look at our strength, you look at our guidance, and then you look at the need in the marketplace and I think that all lines are up very well and with the stock price where it is, again I think it’s a great value and a great buy. I am a stockholder, I buy and I am a firm believer and I've got a big vested interest in making sure that we get the stock to where it should be, which is clearly higher than it is today.

Jeff Markin

Zak, let me add a couple of comments to that. I got asked that similar question, so that as we do investor calls with prospective institutional buyers and the way I sort of describe the business which I think resonates to people that look to this space to invest is that you can look at companies, small companies like ours, startups, and they go through a series of gates. And early on it's very high-risk gate, typically there's a technology, there may be one customer that has signed up to that technology, but there is a big risk as to whether that technology can be expanded into other clients, no more than just one customer out there that would be interested in a particular technology.

And after you sort of go through that gate, where now you got multiple customers, the big question is can you scale the technology now to meet multiple customers’ needs and can you do it over relatively long period of time. And that's a big sort of risk hurdle to get past. After you get past sort of those two hurdles where you've proved them there's a sizeable market and that you've got a technology that you can scale, it becomes at that point, can you get into a reasonable level of growth and actually grow the company, can you expand your sales force and get to an even bigger audience and can you rely on your operations to meet the need as those customers come on and blow past certain sort of capacity walls to get through, and I think we're very much in that latter stages of that. And at each of those stages, the risk reduces and I think we're at the point now where we're building the scale externally with our sales people.

As we said, we doubled our sales force earlier in the year and we're scaling operations and we're doing it in a way where our customers are very happy with our performance and we're building the efficiency that we need to get to the gross profit margins that we think we can achieve, that we've talked about here.

So, I think for new investors coming in or for current investors reinvesting, as Molly said, I think the stock price doesn’t come near to reflecting the opportunity and I think we've demonstrated that we're building that scale externally to bring on new customers and we're building the right operational capability to meet their needs. So, I think it's a great time to buy.

Zak Kim

That's nice. I have just a follow up then. I didn’t hear really – I appreciate those answers, that's excellent, but the number of employees and therefore the ratio of revenues per employee because that then reflects eventual profit margins, and if you can – they all tie together, so I am curious about the number of employees we are at today and then I can figure out the ratio of revenues per employee, whether they're – a person that sweeps the floors all the way to a research scientist, can you enlighten me on that and then I am done?

Molly Henderson

Sure Zak, you are right, and I did miss that. We have 55 current employees.

Zak Kim

Thank you very much.

Jeff Markin

Thank you.

Operator

Our next question is coming from John Putnam with Dawson James Securities. Please state your question.

John Putnam – Dawson James Securities

Yes. Thanks. Just a follow up question, did you have to take any kind of reserve for the guarantee?

Molly Henderson

That's a good question, John. At this point, we've done our analysis, had we offered the guarantee last year, what the impact to our financials would have been and it's in the range of $40000 to $45000. So, from a materiality perspective, I don’t consider this to have a significant impact, but yes, we continue to have a reserve in the event that we achieve that or have any issues where we have to issue the promise to somebody. But again, from a dollar perspective, I am not considering it could be as significant.

John Putnam – Dawson James Securities

Thanks very much.

Jeff Markin

Thanks John.

Operator

It appears we have no further questions. I would like to turn the floor back over to management for any closing comments.

Jeff Markin

Thanks. Given that there are no additional questions, we would like to close today's call. We continue to be very excited about the progress we are making as a company as evidenced by the growing backlog and awarded projects and the associated vote of confidence this represents from our customers. We're glad you took the time to listen to our report and look forward to continuing to keep you up to date on our progress. Thanks and have a good day.

Operator

Ladies and gentleman, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: VirtualScopics, Inc. Q2 2008 Earnings Call Transcript
This Transcript
All Transcripts